What is the BSE Sensex?
Note: BSE Sensex and S&P BSE SENSEX refer to the exact same index. The 'S&P' prefix was added in 2013 after a co-branding partnership between BSE Ltd. and S&P Dow Jones Indices. In India, it is widely known as the Sensex or BSE Sensex.
The BSE Sensex is a free-float market capitalisation-weighted index comprising 30 large, liquid, and financially established companies listed on the Bombay Stock Exchange (BSE). It is one of the primary indicators of the Indian equity market and is widely used to measure overall market performance.
Launched on January 1, 1986, with a base value of 100 and base year 1978–79, the Sensex is India's oldest stock market benchmark index. The "S&P" prefix was added in 2013 following a co-branding partnership between BSE and S&P Dow Jones Indices.
Why is it called the SENSEX?
The name "SENSEX" was coined by stock market analyst Deepak Mohoni in 1989. It is a portmanteau of the words Sensitive and Index - reflecting the index's role as a sensitive barometer of the broader Indian equity market. The term became widely adopted and has since become synonymous with Indian stock market performance globally.
How Does the Sensex Work?
The index is calculated using the free-float market capitalisation methodology. Under this approach, only shares available for public trading are considered while calculating the index value. Shares held by promoters, governments, and strategic investors are excluded.
Companies are selected based on: free-float market capitalisation, liquidity, trading frequency, sector representation, and listing history. The index undergoes periodic reviews and rebalancing to ensure it continues to represent large-cap Indian equities effectively.
Sensex Calculation Formula
Sensex Value = (Total free-float market capitalisation of constituents ÷ Base period free-float market capitalisation) × 100
Example: If the aggregate free-float market cap of all 30 constituents is ₹180 lakh crore and the base market cap is ₹1 lakh crore, the Sensex value = (180,00,000 ÷ 1,00,000) × 100 = 18,000.
Who Maintains the Sensex?
The BSE Sensex is maintained by Asia Index Private Limited, a joint venture between S&P Dow Jones Indices and BSE Ltd. The organisation is responsible for index methodology, periodic reviews, rebalancing, and constituent selection.
What is the Sensex TRI?
The Total Return Index (TRI) version of the Sensex includes dividends paid by constituent companies and assumes those dividends are reinvested back into the index. Most index mutual funds and ETFs benchmark themselves against the Sensex TRI because it provides a more comprehensive representation of investor returns over time.

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